Trouble is out there. When it comes to personal finance, all sorts of factors and unforeseeable events can spoil years of hard work and cost diligent individuals huge sums of money. Some issues are obvious, but others are more clandestine. After all, it’s the problem you never notice that will cause you the most agitation. And while it’s impossible to prepare for every possibility that could affect your finances, taking some time out now to study these four under-the-radar pitfalls will help you protect your financial standing under the worst of circumstances:

Impulse Buys

Unless you keep a detailed ledger of your spending habits and review them often, it’s easy to overlook impulsive purchase decisions. Indeed, impulse buys are done without much forethought (or reflection) and if you don’t build out and stick to a budget from month to month, you can easily forget how much you’ve spent on frivolous items. What’s more, impulse purchases will slowly eat away at your savings and other accounts. Though most people won’t miss $50 here or there, the accumulation of such spending over a long time will have a big impact.

Lack of Insurance

Far too many people go through life without any form of insurance whatsoever. However, even those with insurance coverage might not have the right plan for their situation. Accidents happen, and unless your insurance plan has your back when it matters most, you could end up paying huge medical bills out of pocket. Always remember to review insurance documents carefully and read the fine print!

Divorce

No one gets married thinking that one day they’ll have to worry about a divorce. Yet the numbers don’t lie; couples file for divorce all the time. Unfortunately, if you haven’t signed the proper prenuptial forms beforehand, you’ll struggle to safeguard the assets you’ve accumulated once divorce proceedings begin. Talking about a prenuptial agreement with a partner is an awkward conversation for sure, but it’s one that needs to happen all the same.

Overconfidence

Successful financial management requires a degree of caution. In the end, it’s impossible to predict how the stock market will fluctuate, if you’ll get that big promotion, or if your home will always retain its original value. Hubris, though, prevents people from considering the risks of their actions. Don’t let a few encouraging financial decisions go to your head. No investment is bulletproof, and it’s never a wise idea to leave yourself exposed without a backup plan. Hiring a professional to manage your money, speaking about your investments with trusted family members or friends, and setting aside a rainy-day fund will all help mitigate against a financial doomsday scenario.

Freelancing has never been more prevalent –– or profitable –– than it is right now. In addition, most prognosticators forecast that freelance work will only become more common in the coming years. Though thousands of new professionals are taking up the mantle of the “side hustle,” there are some major drawbacks to freelance work that few seem to consider. Indeed, while freelancing can certainly prove lucrative, it can also present financial pitfalls to inexperienced pros. With that in mind, today we’ll take an in-depth look at the fiscal side of freelancing and answer the question: is it really a good idea?

Advantages of Freelancing

Perhaps the most attractive element to freelance work is the autonomy it offers. Freelancers only work as much as they want to, they can turn down any job that doesn’t suit them, and they never have to answer to a boss breathing down their neck. What’s more, they can set their own schedule and complete tasks at their own pace. On the financial side, veteran freelancers can also charge a premium rate for their services. When taken on a piece-by-piece basis, freelancers can make more money per project than their counterparts in nine-to-five positions.

Drawbacks of Freelancing

Freelancers enjoy the freedom of working on their own, but they also have to reckon with the uncertainty that comes with that luxury. First-time freelancers may struggle to build up a reputation within their industry and could find opportunities sparse. Additionally, since freelancers operate independently they often lack the resources and support regular employees enjoy. Considering that one day freelancers may have to design a web page about monster trucks and the next write a detailed analysis on a new type of streptavidin plate, not having a team to fall back on can be a major hindrance.

In terms of dollars and cents, though freelancers can certainly carve out a living for themselves, they also incur a variety of expenses that nine-to-fivers don’t have to worry about. Most freelancers have to pay higher rates for insurance, since they can’t opt into a group-work plan. They also have to pay higher taxes (normally) since they function as independent contractors.

The Bottom Line

As you may have already surmised, whether or not freelancing is a good decision depends on your individual preferences and personal situation. If you can comfortably manage the trickier aspects of forging your own path in business, then freelancing can help you achieve a better financial status. However, professionals should think long and hard before ditching their “day job” in order to freelance full time, because it’s not as simple –– or as remunerative –– as it may appear at first blush.

For most people, debt is a necessary evil part of life — with an emphasis on the “evil” part. This is because it doesn’t take long for manageable debt to spiral out of control.

And contrary to popular belief, according to experienced bankruptcy attorney Charles Huber, who is the Principal of the Law Office of Charles Huber, the majority of people with serious debt problems aren’t people who are taking exotic vacations or buying luxury cars, when they should be paying their bills and living within their means. On the contrary, in most cases people with serious debt problems are honest, hard-working individuals sincerely trying to regain control of their finances. Unfortunately, because of punitive interest rates and aggressive creditors, escaping the debt hole is an exercise in frustration and futility. They take one step forward, and their debt pulls them two steps back.

The good news is that living a debt-free life is not an elusive ideal. It is a practical reality — but only if you keep these three essential tips in mind:

  1. Monitor All Spending

Many people — including those who aren’t (yet) dealing with major debt problems — don’t know how much they spend. At most, they have a hazy, fuzzy “guestimate”; one that almost always vastly underestimates the gap between their income and expenses. Monitoring all spending, from car payments to Starbucks’ lattes, is the fundamental first step in escaping debt and avoiding recapture in the future.

  1. Cut Down on Discretionary Spending

Speaking of Starbucks’ lattes: yes, they’re good. Actually, they’re delicious. But people in debt shouldn’t be spending $5-$10 dollars a day (or more!) on upscale beverages. Cutting down on discretionary spending is easier than most people realize (or dread), and the rewards are immediate. And of course, it’s still fine to enjoy a latte every now and then!

  1. Renegotiate Debt

Here is a secret that creditors don’t want debtors to find out: in most cases they will renegotiate debt and settle for a lesser amount. Here is why: if creditors don’t get paid, then unless they have an in-house collection department, in most cases they will eventually sell the debt to a third-party. If that third-party ends up collecting the debt, the original creditor will receive a partial payment depending on various factors (the amount of the debt, the age of the debt, etc.). As such, some creditors will simply accept a lower amount now vs. run the risk and incur the cost of selling the account to a third party.

If These Tips Don’t Work…

Hopefully, the above tips will help you escape unsustainable debt now, and avoid it in the future (of course, manageable and reasonable debt is fine and in most cases like buying your first house, it’s necessary).

However, if your major debt problems can’t or won’t be solved, then seriously consider filing for bankruptcy. The moment you do, all collection activity — including interest, wage garnishments, communications, lawsuits, and so on — must cease. Your creditors will then get paid according to the court-appointed trustee, and you’ll typically be able to keep your house and other exempt assets, like retirement savings.

At the very least, speaking with an experienced bankruptcy attorney is a smart move, so that you can understand all of your options, and see what makes the most sense for your current and long-term financial health.

Determining your income sources is an important way to find out exactly how much money you have coming in. You may not realize how much money actually comes in and leaves your house in a month. To make an effective budget, you must know exactly what you are dealing with.

To determine your income sources, make a table, like the one below, and record all of the money coming into your home. If you have quarterly income, multiply the amount by 4 and then divide by 12 to find the monthly income. For semi-annual income, multiply by 2 and then divide by 12.

Income Sources Bi-Weekly Weekly Monthly
Your Wages
(Take Home)
Your Spouses Wages
(Take Home)
Part-time Job
Rental Income
Alimony
Child Support
Social Security
Benefits
Veteran’s Benefits
Workman’s
Compensation
Income Tax Refund
Other
Other
Other
Other
TOTAL:

Trading CFDs is an excellent way of making money because they thrive in almost all market conditions. For you to develop a stable trading ground, you need to have and implement the right ideas and strategies. Here are 7 quick tips for CFDs to help you build a rising and steady equity curve.

Establish A Trading Plan

All kinds of trading require discipline to eliminate temptations and emotional reactions. Plan your entry strategy, risk management, money control, exit strategy and stick to them. Try to avoid selling or buying early and always wait for the market prices to reach the level you are comfortable trading at. Plan ahead of time the amount of money you want to place on each trade, and how much capital to put in every trade. Also, don’t make changes to your plans during a session not unless they will serve as a last resort.

Keep A CFD Trading Journal

A CFD trading journal helps you record all the trades that you make, wins as well as losses. It keeps you informed about the reasons you entered or exited a particular trade. Most importantly, you can always deduce your performance patterns so that you reflect on your thoughts and strategies.

Your journal should include the following items:

  • Trading period
  • Reasons for trading
  • What you sold/bought
  • Profits or losses
  • A chart showing entry, profit target and stop

Create Realistic Trading Goals

The first rule of preserving precious capital through CFDs is to ensure that your account is alive and running for the first year. For your survival, therefore, you must establish realistic goals that are clearly defined. Your first step can be identifying what you want which is the same as having a reason to trade. Then, focus on it by doing whatever you can on a daily basis to help you achieve your goals. Remember to keep at bay all distractions that might sway you away from your objectives.

Make Use Of CFD Stops Where Necessary

If you ever find yourself on a losing line, exit the markets for a while so that you cut the losses quickly. Never also make the mistake of moving your stop loss further away, hoping that things will turn around. Trading CFDs is usually demanding and tempting meaning that getting emotional is very easy. For every trade that you enter, it will have a CFD stop assigned to it that you should consider using if need be. And as mentioned earlier, you should identify a CFD stop strategy outside live trading.

Keep Up With Market Trends And News

Various events have the potential of causing major effects on trading markets and often take traders by surprise. To avoid that, you need to stay up-to-the-minute with geopolitical and global financial events. Note that not all news releases affect markets, but being aware of the current events can protect you from making obvious errors thereby helping you cut down possible losses. If you sign up for a reputable trading site such as CMC Markets, you get the opportunity of receiving free news on the events that are anticipated or are currently moving the financial markets on a regular basis.

Only Trade When You Have A Positive Mindset

To succeed in CFDs, you must be prepared to lose. No particular trader that has a 100 percent winning strategy because everyone is bound to fail at some point. In most cases, incurring losses bring about the feelings of anger, anxiety or fear. Volatile markets, on the other hand, bring along a sense of doubt. If you trade while having these emotions, you might end up making unnecessary mistakes and hasty decisions in a bid to recoup losses. For these reasons, always ponder trading when you are in the right mindset and take short breaks if you are not.

Stick To Instruments And Markets That You Are Experienced In

Although CFD trading offers you a good number of instruments to trade in, you must stick to those that you are used to. Once you gain more knowledge and self-confidence, you can venture into more sophisticated ones such as forex or indices. Also, don’t trade too many markets because your interests would be spread too thinly. Choose several sectors, get every information you need and invest in them.

CFC trading is an ideal avenue to pursue if you are well informed about its ins and outs. Following the above seven tips will help you become a more successful CFD trader.